Payroll services in India

US payroll has a familiar shape: withholding, a quarterly return, a year-end form. India has the same shape and different parts, and the parts do not map one-to-one.

TDS is tax deducted at source on salaries — the withholding equivalent. It is deposited monthly and reported quarterly on Form 24Q, and at year end each employee receives a Form 16, which is the closest analogue to a W-2. The EPF ECR is the monthly Provident Fund filing; Provident Fund is India's mandatory retirement contribution, roughly comparable in function to a 401(k) but statutory rather than elective. ESI is Employees' State Insurance, a contributory medical and cash-benefit scheme that applies to employees earning up to ₹21,000 a month in gross pay. Professional Tax is a small state-level levy, typically around ₹200 a month, with its own schedule in each state.

Each of those has its own deadline, its own portal and its own consequence for being late. Running them is less about difficulty than about never missing one, twelve times a year, in every state where you employ someone.

Indian salaries have traditionally been split into a small Basic component and a larger collection of allowances, because most statutory costs are computed on Basic rather than on total pay. That arithmetic no longer works.

Under the uniform wage definition introduced by the Code on Wages, Basic + DA must be at least 50% of total remuneration, and excess allowances are added back into "wages" for statutory purposes. Provident Fund, gratuity, bonus and leave encashment are then computed on that larger base.

The practical effect is that a structure designed to minimize statutory cost under the old definition now produces a mismatch between what was contributed and what should have been — and that gap is retrospective exposure sitting on your entity's books. We design salary structures on the current rule from the start, so the base is right before anything is computed on it.

Payroll that cannot be reconciled is not finished. Every cycle produces payslips for employees and, for you, the payroll register behind them: gross, each statutory deduction, employer contributions and net, line by line.

Alongside the register come the filing proofs — the challans and acknowledgements showing that each deposit was made and each return filed. Your finance team can tie the month's payroll cost to the money that actually left, and to the returns that were lodged against it, without asking us for anything.